Exporters, hoteliers and retailers have howled as the strong currency has hurt sales. Hotel booking have plunged and look set to drop further in the winter season as foreign tourists stay away. Retailers have seen shoppers defecting across the border and exporters say they have retained market share only by slashing margins or even selling at a loss.

The Swiss National Bank’s decision to keep the floor on the franc’s appreciation against the euro constant at Sfr1.20 today will have no doubt disappointed them. Especially when there were many reasons for the central bank to act.

The SNB has instead favoured a wait-and-see approach, hoping that the eurozone turmoil doesn’t worsen and that the franc’s depreciation against the single currency continues of its own accord.

But the central bank suggested that, if the franc does not weaken further against the euro in the coming months, then it is likely to act. Read more

The European Central Bank distanced itself on Tuesday from the Swiss National Bank’s plans to combat the overvalued franc by linking it to the euro. With the SNB likely to acquire substantial piles of euro assets as a result of its intervention, one fear is that it will worsen tensions in eurozone debt markets by buying only AAA bonds. Italy’s spreads versus Germany would rise further.

But maybe it would be in the SNB’s interest to help the ECB? By buying lower quality bonds, the Swiss central bank could display a level of recklessness that might convince financial markets of its determination to do whatever is necessary to weaken the franc. Moreover, given the franc is now linked to the euro, the SNB has a greater interest in a stable eurozone. “What would be great now would be if the SNB bought €50bn in Italian bonds – it would be good for everyone,” quipped one trader.

It was a while coming, but the Swiss National Bank has finally done what was needed for it to have a decent chance of halting the franc’s appreciation.

The SNB on Tuesday said it would set a minimum exchange rate of Sfr1.20 to the euro. In order to maintain the peg, it is prepared to buy foreign currency “in unlimited quantities”. Though this could well result in steep paper losses – and so anger its owners, the SNB is right to act.

When confidence is shot, policy must get ahead of the curve if it is to count. Do less than markets expect, and there is a decent chance that measures will have the opposite impact to what policymakers were hoping for.

The franc was already at record highs as a result of the eurozone crisis. But the shambles in the US and recent suggestions Japan will intervene to stem the yen’s gains have accelerated the pace of the Swiss currency’s gains.

Concerned that this will only add the woe of the country’s exporters, the Swiss National Bank today took action. But in such uncertain times, even saying you will cut rates “as close to zero as possible”, and pledging to intervene if appreciation continues, counts for little. This from the FT’s Peter Garnham: Read more

If rumour is true, things are looking up for the 100,000 Hungarians more than 90 days past their mortgage due date. What’s left of Hungary’s international loan may end up in a mortgage-relief fund, intended to allow people to rent their homes, reports Reuters.

The new fund – reported in daily Magyar Hirlap and not yet confirmed by officials - would buy property (that would otherwise stand to be repossessed) from commercial banks, allowing mortgage-holders to rent the property. The paper also said that the bad loans of households would be replaced by state loans, though it did not name a source. Read more

Strong inflation data for April seems to have reassured the Swiss central bank into allowing the franc to strengthen to a new all-time high against the euro.

The franc has been strengthening all year, with the Swiss central bank often rumoured to have intervened, selling francs. Central bank governor, Philip Hildebrand, has previously stated a policy of intervention to counter “excessive appreciation”, but the bank never confirms individual cases. More on ft.com.

One Swiss franc can buy more euros than at any time since the launch of the currency in 1999. At 15.47 today, the currency traded at 1.4309, breaking its previous record of 1.4315 reached in October 2008.

Significant strengthening occurred last week, following comments from central bank board member Jean-Pierre Danthine. Read more

It may be coincidence, but the three previous times we reported rumours of bank intervention in the forex markets, the level at which they appeared to intervene was about 0.684 EUR per CHF (1, 2, 3). Read more

The Swiss National Bank has issued a characteristic response to questions of market intervention to weaken the Swiss franc: “We’re not commenting on that,” a spokesman told Reuters. Some traders had reported market activity by the bank, although it’s not conclusive from the chart when compared to the spike last Tuesday, when similar rumours were reported.

Traders say the Swiss National Bank was seen in Asian markets selling francs and buying euros. This would fit with Phillip Hildebrand’s stated policy of intervention to prevent excessive appreciation of the franc, which could harm Switzerland’s economic recovery. The SNB declined to comment. (Reuters)

The Swiss franc has dropped 0.2 per cent amid speculation that the central bank sold the currency for the second time today. The central bank refused to comment. It is thought the francs bought euro.

The Swiss franc has been appreciating significantly against the euro. New central bank governor Philip Hildebrand has a stated policy of intervention where necessary to prevent ‘excessive appreciation’ of the franc, which has risen by 0.9 per cent against the euro since the start of the year. Read more

Eastern Europe is looking for ways to reduce dependence on loans denominated in foreign currencies, particularly the euro and Swiss franc.

Officials at the EBRD meeting in London this weekend agreed to find ways to develop local currency markets in order to reduce dependence on foreign currency credits. Officials are not looking to regulate but to encourage voluntary moves by banks to tighten rules on foreign currency loans. Officials plan to meet again early next year, preparing concrete proposals by spring. Read more

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Chris Giles has been the economics editor of the Financial Times since 2004. Based in London, he writes about international economic trends and the British economy. Before reporting economics for the Financial Times, he wrote editorials for the paper, reported for the BBC, worked as a regulator of the broadcasting industry and undertook research for the Institute for Fiscal Studies. RSS

Claire Jones is the FT's Eurozone economy correspondent, based in Frankfurt. Prior to this, she was an economics reporter in London. Before joining the Financial Times, she was the editor of the Central Banking journal. Claire studied philosophy and economics at the London School of Economics. RSS

Robin Harding is the FT's US economics editor, based in Washington. Prior to this, he was based in Tokyo, covering the Bank of Japan and Japan's technology sector, and in London as an economics leader writer. Robin studied economics at Cambridge and has a masters in economics from Hitotsubashi University, where he was a Monbusho scholar. Before joining the FT, Robin worked in asset management and banking. RSS

Sarah O’Connor is the FT’s economics correspondent in London. Before that, she was a Lex writer, covered the US economy from Washington and the Icelandic banking collapse from Reykjavik. Sarah studied Social and Political Sciences at Cambridge University and joined the FT in 2007. RSS

Ferdinando Giugliano is the FT's global economy news editor, based in London. Ferdinando holds a doctorate in economics from Oxford University, where he was also a lecturer, and has worked as a consultant for the Bank of Italy, the Economist Intelligence Unit and Oxera. He joined the FT in 2011 as a leader writer. RSS

Emily Cadman is an economics reporter at the FT, based in London. Prior to this, she worked as a data journalist and was head of interactive news at the Financial Times. She joined the FT in 2010, after working as a web editor at a variety of news organisations.
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Ralph Atkins, capital markets editor, has been writing for the Financial Times for more than 20 years following an economics degree from Cambridge. From 2004 to 2012, Ralph was Frankfurt bureau chief, watching the European Central Bank and eurozone economies. He has also worked in Bonn, Berlin, Jerusalem and Brussels. RSS

Ben McLannahan covers markets and economics for the FT from Tokyo, and before that he wrote Lex notes from London and Hong Kong. He studied English at Cambridge University and joined the FT in 2007, after stints at the Economist Group and Institutional Investor. RSS